A couple of weeks ago, Tesco launched a new life insurance policy for people aged 55 years and above. The policy, which boasts of a guarantee for subscribers to leave loved ones a lump sum of money that is tax-free, has no medical requirements for the 50 to 75-year-olds.

In addition people who take out the policy before June 26, 2008 – a month from yesterday – will be given a gift card of £20 for free.

While such incentive is meant to encourage potential subscribers to quickly decide on coming forward, not a few people always assume there is a catch in it, carefully hidden. The trouble with this is you never can tell until you have signed up and won’t be able to easily wriggle out.

Other incentives the life insurance policy has include easy subscription online or via the telephone. Also the payment of premium ends when one clocks the age of 90, but the customer continues to enjoy the cover until their death.

Explaining the way the process works, Tesco estimates that a 55-year-old male who pays £10 per month will receive cover worth up to £2,413. On the contrary a female subscriber paying the same amount each month gets £647more from the cover.

This disparity may mean little, but the big issue is whether all subscribers will get the worth of their money in the end.

Hailing it as a unique initiative coming from consumers themselves, head of Tesco Life Insurance, Jeremy Sutton explained that customers had urged the insurer to introduce a product that would meet their needs for leaving something for loved ones. As such this comes as a response to the request and Mr Sutton bragged that the prices were “the best value cover in the market”.

Even as the expert at Tesco Life Insurance advanced this argument other opinions that seek to counter it filtered in. One of this is that from rival ASDA, whose life insurance for the same age range was rolled into the market recently.

Its Head of Insurance, Gideon Ingham considers the Tesco offer as just another unfair life insurance product that takes more from consumers than it will give them in the end. “We cannot understand why another new product to market hasn’t got a cap on it,” he said as he continued that, “this launch looks like every little premium helps Tesco and we are asking them to review its offering and introduce a cap.”

One will understand Mr Ingham’s criticism if their own product of similar benefits is studied. Responding to the question why do insurance make over 55s life insurance policies so expensive that they pay more and get less in pay outs, ASDA promised to introduce something the would be a complete change and customers who maintain their premiums would never be made to pay more than they’d get.

The insurer further lamented that the over 50s life cover policy holders have been penalised for the longevity that is none of their fault by being made to pay more to insurers.

To reverse the trend ASDA, priding itself as having a long standing reputation for championing the interests of customers, said it will go the extra mile to identify and come up with policies that do not unfairly penalise consumers. Its new life cover, it claims, is a step in this direction.

The trouble here is one can not easily reveal whether ASDA is, as it argues, indeed acting as the champion of consumers or merely using them to promote its interest over and above rivals. For consumers, especially the over 50s, it’s time to be really careful and take time shopping around before signing up life insurance policies.